Williams v. City of Phila., 188 A.3d 421 (2018)

July 18, 2018 · Supreme Court of Pennsylvania · Nos. 2 & 3 EAP 2018

188 A.3d 421

Lora Jean WILLIAMS; Gregory J. Smith; CVP Management, Inc. d/b/a or t/a City View Pizza; John's Roast Pork, Inc. f/k/a John's Roast Pork; Metro Beverage of Philadelphia, Inc. d/b/a or t/a Metro Beverage ; Day's Beverages, Inc. d/b/a or t/a Day's Beverages; American Beverage Association; Pennsylvania Beverage Association; Philadelphia Beverage Association ; and Pennsylvania Food Merchants Association, Appellants
v.
CITY OF PHILADELPHIA and Frank Breslin, in his Official Capacity as Commissioner of the Philadelphia Department of Revenue, Appellees

Nos. 2 & 3 EAP 2018

Supreme Court of Pennsylvania.

Argued: May 15, 2018
Decided: July 18, 2018

Charles Lyman Becker, Esq., Tracie L. Palmer, Esq., Shanin Specter, Esq., David Collin Williams, Esq., Kline & Specter, P.C., Allyson N. Ho, Esq., Michael E. Kenneally, Esq., John P. Lavelle Jr., Esq., Marc J. Sonnenfeld, Esq., Morgan, Lewis, & Bockius, L.L.P., for Appellants.

Scott B. Cooper, Esq., Schmidt Kramer, P.C., for Sen. Anthony Wms., Rep. Angel Cruz, & 32 other Indiv. Pa. Sens. and Mbs. of the Pa. Hs. of Reps., Appellant Amicus Curiae.

Thomas Herman Kohn, Esq., Markowitz & Richman, for Teamsters Local Union 830, Appellant Amicus Curiae, Pennsylvania Conference of Teamsters, Appellant Amicus Curiae.

Kevin James McKeon, Esq., Whitney Elizabeth Snyder, Esq., Hawke McKeon & Sniscak, L.L.P., for National Federation of Independent Business Small Business Legal Center, Appellant Amicus Curiae, Pennsylvania Chamber of Business and Industry, Appellant Amicus Curiae, Pennsylvania Restaurant and Lodging Association, Appellant Amicus Curiae, Pennsylvania Retailers Association, Appellant Amicus Curiae, National Association of Theatre Owners, Appellant Amicus Curiae, Tri-State Automatic Merchandising Council, Appellant Amicus Curiae.

Mark Alan Aronchick, Esq., Andrew Martin Erdlen, Esq., John Stephen Stapleton, Esq., Hangley Aronchick Segal Pudlin & Schiller, Marcel S. Pratt, Esq., City of Philadelphia Law Department, Dimitrios Mavroudis, Esq., Matthew Stephan Olesh, Esq., Kenneth Israel Trujillo, Esq., for Appellees.

Matthew P. Faranda-Diedrich, Esq., Jessica Lynne Itzkowitz, Esq., Royer Cooper Cohen Braunfeld LLC, Sabrina Adler, Esq., Deborah Barron, Esq., Seth E. Mermin, Esq., Benjamin Winig, Esq., for ChangeLab Solutions, Appellee Amicus Curiae, Children's Defense Fund, Appellee Amicus Curiae, Pennsylvania Association for the Education of Young Children, Appellee Amicus Curiae, Highscope Educational Research, Appellee Amicus Curiae, Pennsylvania Child Care Association, Appellee Amicus Curiae.

Lee Applebaum, Esq., Diane Bernoff Sher, Esq., Fineman Krekstein & Harris, P.C., Jacqueline Danielle DiRubbo, Esq., for The Sustainable Business Network of Greater Philadelphia, Appellee Amicus Curiae.

Daniel Berger, Esq., Lawrence Jay Lederer, Esq., Neil Kailash Makhija, Esq., Sarah Rebecca Schalman-Bergen, Esq., Berger & Montague, P.C., Lowell Lee Thomas, Esq., Philadelphia Housing Development Corporation, for African-American Chamber of Commerce of Pennsylvania, New Jersey, and Delaware, Appellee Amicus Curiae.

Michael J. Quirk, Esq., Berezofsky Law Group LLC, Rachel S. Bloomekatz, Esq., for American Heart Association, Appellee Amicus Curiae, Pennsylvania Medical Society, Appellee Amicus Curiae, American Cancer Society Cancer Action Network, Appellee Amicus Curiae, Food Trust, Appellee Amicus Curiae, Healthy Food America, Appellee Amicus Curiae, Momsrising.org, Appellee Amicus Curiae, National Alliance For Hispanic Health, Appellee Amicus Curiae, National Association of Chronic Disease Directors, Appellee Amicus Curiae, National Association of Local Boards of Health, Appellee Amicus Curiae, Notah Begay III Foundation, Appellee Amicus Curiae, Public Health Law Center, Appellee Amicus Curiae, American Medical Association, Appellee Amicus Curiae, National Association of County and City Health Officials, Appellee Amicus Curiae, Pennsylvania Association of Staff Nurses and Allied Professionals, Appellee Amicus Curiae, Philadelphia County Medical Society, Appellee Amicus Curiae, Physicians for Social Responsibility Philadelphia, Appellee Amicus Curiae.

Michael J. Boni, Esq., John Elliott Sindoni, Esq., Boni, Zack & Snyder LLC, for Philadelphia Opportunities Industrialization Center, Inc., Appellee Amicus Curiae, City of Berkeley, Appellee Amicus Curiae.

Farimah F. Brown, Esq., Jessica E. Mar, Esq., for City of Berkeley, Appellee Amicus Curiae.

Rigel Caitlin Farr, Esq., William J. Leonard, Esq., for Obermayer Rebmann Maxwell & Hippel LLP, International Municipal Lawyers Association, Appellee Amicus Curiae.

Rachel Kathleen Gallegos, Esq., Stephen G. Harvey, Esq., Steve Harvey Law LLC, for Public Citizens for Children and Youth, Philadelphia, Appellee Amicus Curiae, Ceiba, Inc., Philadelphia, Appellee Amicus Curiae, Delaware Valley Association For the Education of Young Children, Philadelphia, Appellee Amicus Curiae, Public Health Management Corporation, Philadelphia, Appellee Amicus Curiae.

Michelle S. Payne, Esq., for Delaware Valley Association for the Education of Young Children, Appellee Amicus Curiae.

Wendy Susanne Smith, Esq., Morgan & Akins, for Philadelphia Parks Alliance, Appellee Amicus Curiae.

Joshua D. Snyder, Esq., Boni & Zack, LLC, for City of Berkeley, Appellee Amicus Curiae, City of Berkeley, Appellee Amicus Curiae, Philadelphia Opportunities Industrialization Center, Inc., Appellee Amicus Curiae.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

CHIEF JUSTICE SAYLOR

In this limited appeal by allowance, we address a claim that the Philadelphia City Council violated an express statutory limitation on taxing power delegated to it by the Pennsylvania General Assembly, when the council created what is colloquially referred to as the City's soda or beverage tax.

In June 2016, City Council enacted the challenged ordinance, which imposes a tax regarding specified categories of drinks sold, or intended to be sold, in the municipal limits. See PHILA. CODE , ch. 19-4100. Although the council's formal denomination for this levy was the "Sugar-Sweetened Beverage Tax," a broader array of beverages is impacted, including specified drinks containing sugar substitutes. See Williams v. City of Phila. , 164 A.3d 576, 579 (Pa. Cmwlth. 2017) (en banc ) (delineating these categories with reference to Section 19-4101(3) of the Philadelphia Code). For convenience, the term "beverage tax" is employed below, and the words "beverage" and "beverages" are used to refer to drinks within the purview of the tax.

The tax applies to the supply, acquisition, delivery, or transport of beverages. See PHILA. CODE § 19-4103(1). It is generally collected when beverages are transferred from a distributor, wherever located, to a Philadelphia retailer, which the ordinance refers to as a "dealer." Id. § 19-4101(1). Apart from such transfers, the tax is also collected in connection with the "transport of any [covered] beverage into the City by a dealer." Id. § 19-4103(1).

The beverage tax is assessed at one and one-half cents per fluid ounce, based on the volume of the drink to be sold at retail, see id. § 19-4103(2)(a) & (b), and is ordinarily paid by distributors, albeit that dealers must remit payment under some circumstances. See id. §§ 19-4103(1), 19-4105(1), (2) & (4), 19-4107. In all cases, the levy applies only when the transfer or transport "is for the purpose of the dealer's holding out for retail sale within the City the [covered beverages]." Id. at § 19-4103(1) (emphasis added).

Appellants -- a group of consumers, retailers, distributors, producers, and trade associations -- commenced the present civil action against the City and the Commissioner of the Philadelphia Department of Revenue, in the court of common pleas, challenging the legality and constitutionality of the tax and seeking declaratory and injunctive relief. In relevant part, Appellants advanced a theory of express preemption premised upon the Sterling Act,¹ by which the Pennsylvania Legislature afforded to the Philadelphia City Council broad authority to impose taxes, within its borders, inter alia , on "transactions" and "subjects." 53 P.S. § 15971(a) (conferring upon the City "the power to [tax] any and all subjects of taxation which the Commonwealth has power to tax but which it does not ... tax or license"). Appellants emphasized, however, that, per the explicit terms of the enactment, City Council lacks the authority to impose duplicative taxes, i.e. , any tax on a transaction or subject "which is now or may hereafter become subject to a State tax ...." Id.

According to the complaint, the beverage tax duplicates the six-percent state sales and use tax levied on the purchase price of tangible personal property, including "soft drinks." 72 P.S. §§ 7201(a) & (m), 7202. Prominent within the complaint was Appellants' contention that a subject matter of the local and state taxes -- i.e. , beverages -- is the same. Accord Brief for Appellants at 8 ("Virtually every beverage covered by the [beverage tax] is already subject to the Commonwealth's sales tax, and vice versa.").

From the outset, Appellants recognized that the beverage tax is assessed at a different tier of commercial activity than the state sales and use tax, since the beverage tax generally is paid at the distributor/dealer level. See, e.g. , Complaint ¶ 4 ("[T]he City has attempted to skirt the preemptive effect of the [state sales and use tax] by imposing the [beverage tax] on 'the distribution' of soft drinks that will be held out for retail sale in the City -- one step up the chain from the actual retail sale of these beverages to consumers."). It was the Appellants' position, however, that this distinction lacked legal significance, since, they asserted, the practical effect is that the tax is imposed on consumers, just as in the case of the state sales and use tax.

In this regard, Appellants also stressed that the beverage tax has a strong retail-sale nexus, see PHILA. CODE § 19-4103(1). See, e.g. , Complaint ¶ 58 ("On its face, the plain language of the Tax demonstrates that it is intended to burden the retail consumer."). Along these lines, Appellants invoked a series of judicial decisions recognizing that the character of a tax is determined according to its incidence. See, e.g. , id. at ¶ 133 (citing, among other cases, Dawson v. Ky. Distilleries & Warehouse Co. , 255 U.S. 288, 292, 41 S.Ct. 272, 274, 65 L.Ed. 638 (1921) ).

The common pleas court sustained preliminary objections advanced by the City. See Williams v. City of Phila. , No. 1452 Sept. Term 2016, slip op. , 2016 WL 7422362 (C.P. Phila. Dec. 19, 2016) (Glazer, J.). Analyzing the Sterling Act, the court reasoned that the enactment does not preclude a local tax on a different "aspect of [a business's] operations" than is taxed by the state. Id. at 5. In this respect, the court cited, inter alia , National Biscuit Co. v. City of Philadelphia , 374 Pa. 604, 98 A.2d 182 (1953), which held that payment of the state corporate income tax and other taxes does not bar the City, under the Sterling Act, from exacting a mercantile tax measured by the gross volume of business. See id. at 613-14, 98 A.2d at 186-87. According to the court of common pleas, such decisions establish that the Sterling Act only forbids a political subdivision from taxing the "same aspect of a business that is also taxed by the Commonwealth." Williams , No. 1452 Sept. Term 2016, slip op. at 5.

From a broader tax-law perspective, the county court explained that, in determining whether one tax duplicates another, the "incidence" of the two taxes is controlling, with "incidence" referring to "the subject matter [of the tax] and, more important, the measure of the tax, i.e. , the base or yardstick by which the tax is applied." Commonwealth v. Nat'l Biscuit Co. , 390 Pa. 642, 652, 136 A.2d 821, 825-26 (1957). In this regard, the court deemed it determinative that the beverage tax is a levy on distribution of beverages on a per ounce basis, see PA. CODE § 19-4103(2), and that legal liability to pay the tax remains on distributors and, in certain instances, dealers , see id. §§ 19-4105(1), (2) & (4), 19-4107. On the other hand, the common pleas court highlighted, the state sales and use tax is levied upon "sale[s] at retail," and the legal liability to pay the tax falls upon the consumer . 72 P.S. § 7202(a). Furthermore, the court noted, the beverage tax is triggered irrespective of whether dealers actually sell the drinks to consumers. See PHILA. CODE § 19-4103(1).

The common pleas court also rejected Appellants' argument that the incidence of the beverage tax should be determined according to post-tax economic consequences experienced in the marketplace. See Williams , No. 1452 Sept. Term 2016, slip op. at 7 (summarizing Appellants' argument that "the incidence of the tax[es] [are] the same because the [beverage tax] will cause the distributor to pass the economic burden of the tax [on to] the dealer who will then pass the economic burden to the consumer"). In fact, the court deemed such considerations to be irrelevant. See id. ("What is determinative is how the [beverage tax] operates, not what private actors will do in response to the tax to offset the burden of the tax or other post-tax economic transactions." (citing Nat'l Biscuit Co. , 390 Pa. at 652, 136 A.2d at 826 ) ). In this regard, the court drew support from Gurley v. Rhoden , 421 U.S. 200, 207-08, 95 S.Ct. 1605, 1610, 44 L.Ed.2d 110 (1975) (holding that federal and state excise taxes on fuel are appropriately included in the measure of a fuel provider's taxable gross receipts for purposes of a Mississippi sales tax -- albeit that the economic burden of the tax is conventionally passed on to consumers -- based on the conclusion that the legal incidence of tax fell upon the provider), and Blauner's Inc. v. City of Phila. , 330 Pa. 342, 344-46, 198 A. 889, 891-92 (1938) (determining that a local sales tax did not duplicate the state corporate net income tax or other taxes imposed by the Commonwealth, regardless of whether corporations or consumers bore the tax burden).

Ultimately, the common pleas court differentiated the beverage tax as a "non-retail, distribution level tax." Williams , No. 1452 Sept. Term 2016, slip op. at 6. Given its conclusion that the tax does not apply to the same transaction or subject as the state sales and use tax, the court discerned no violation of the Sterling Act.

A divided, en banc panel of the Commonwealth Court affirmed. See Williams , 164 A.3d 576. Like the county court, the majority reasoned that, in determining whether a tax is duplicative, the focus is upon the incidence of the tax; such incidence is ultimately determined according to the substantive text of the enabling legislation; and the concept of legal incidence does not concern post-tax economic actions of private actors. See id. at 586. In this regard, the majority also referenced the Supreme Court of the United States' decision in Gurley and this Court's opinion in Blauner's, Inc. See id. at 586, 589. Because the City's beverage tax and the state sales and use tax are imposed on different, albeit related, transactions and measured on distinct terms, the majority likewise concluded that the Sterling Act was not offended. See id. at 588-89 & n.20 ("[T]he [beverage tax] taxes non-retail distribution transactions and not retail sales to a consumer.").

Judge Covey dissented, joined by Judge Cohn Jubelirer, opining that the beverage tax is indeed duplicative of the state sales and use tax, because the former is only triggered when "there is a retail sale involved." Id. at 597 (Covey, J., dissenting) (emphasis omitted) (relying, inter alia , upon Section 19-4103(1) of the Philadelphia Code). In this regard, the dissent criticized the majority for failing to account for the full text of the governing ordinance, the "entire underpinning" of which, the dissent reasoned, was "the retail sale mandate." Id. at 598. In light of this perspective, the dissent concluded that the tax's incidence is the retail transaction, not distribution. See id. at 598-99. To the degree that there was any ambiguity, the dissent invoked the principle that statutes imposing tax liability are to be strictly construed against the government.² See id. at 600 (citing Tech One Assocs. v. Bd. of Prop. Assessment, Appeals & Review of Allegheny Cty. , 617 Pa. 439, 458, 53 A.3d 685, 696 (2012) ).³

Appeal was allowed on a limited basis to address whether the beverage tax violates the Sterling Act. As the issue is one of law, our review is plenary.⁴

The present arguments to this Court delve deeply into federal and state case law pertaining to a variety of taxing subjects and are at times highly complex. In the broadest frame, Appellants maintain that the beverage tax represents a transparent effort, by the Philadelphia City Council, to do indirectly what it could not do directly. See, e.g. , Brief for Appellants at 2, 13 (contending that the City cannot "sidestep the Sterling Act by dressing up a tax on selling retail products as a tax on 'distribution transactions' "). The tax is thus preempted, Appellants posit, because the City is taxing "the same thing" as the Commonwealth, in violation of the Sterling Act's prohibition on double taxation. Id. at 15; see also id. at 20 ("The Tax was intended to and in fact does operate on selling soft drinks in Philadelphia.").

Appellants continue to stress that both the local beverage tax and the state sales and use tax apply to the same beverages, and thus, in their view, the same subject, as well as the retail nexus associated with the beverage tax. See, e.g. , id. at 1 ("Although the [beverage tax] is generally collected from those who distribute the drinks to retailers, it is imposed only where the drinks are sold or intended to be sold at retail in Philadelphia." (emphasis in original) (citing PHILA. CODE § 19-4103(1) ). They contend that this frame of reference favors a test for assessing tax duplication for Sterling Act purposes grounded on economic impact. See, e.g. , id. at 15 ("Although cast as a tax on distribution, the City's Tax is inextricably tied to retail sales and is ultimately borne by the same Philadelphia consumers who already pay the Commonwealth's sales tax."). In this respect, Appellants reference Murray v. City of Philadelphia , 364 Pa. 157, 71 A.2d 280 (1950), for the proposition that, "[i]n determining whether double taxation results, ... the practical operation of the two taxes is controlling." Id. at 165, 71 A.2d at 284 (emphasis added). Consistent with the dissent in the Commonwealth Court, Appellants also emphasize that tax enabling statutes are to be strictly construed.⁵

Appellees, on the other hand, maintain that the beverage tax ordinance taxes non-retail, distribution-level transactions and therefore, does not duplicate the state sales and use tax. It is their position that tax duplication, for purposes of the Sterling Act, should be assessed according to a standard per which only a local tax having the same legal incidence as a state tax should be deemed preempted. See, e.g. , Brief for Appellees at 15 ("Contrary to the core of [Appellants'] position, duplication is shown through actual sameness -- not mere relatedness."). Appellees highlight that the beverage tax touches upon only a subset of commodities subject to the state sales and use tax; employs a different measure (volume as opposed to price); operates on the sale at distribution, whether or not a retail sale occurs, as long as one was intended; and is paid by distributors or dealers as opposed to consumers. According to Appellees, the beverage tax "is a lawful exercise of the power the General Assembly granted to the City of Philadelphia to wrestle with its own tax base and local politics in order to solve its own problems and meet its own needs." Brief for Appellees at 1.⁶

I. Preemption Under the Sterling Act

In considering the General Assembly's intentions in devising the Sterling Act, we apply conventional principles of statutory construction, which are discussed in myriad decisions of this Court. See, e.g. , Norfolk S. Ry. Co. v. PUC , 621 Pa. 312, 328, 77 A.3d 619, 629 (2013). The analysis encompasses close adherence to terms of a statute that are plain and clear and resort to other approaches of discernment only in the presence of ambiguity or inexplicitness.

See id. Where ambiguity or inexplicitness exists, the Court may afford weight to other considerations, including the object to be attained by the statute under consideration and the consequences of a particular interpretation. See id. See generally 1 Pa.C.S. §§ 1921 - 1939.

As the litigants recognize, the Sterling Act is an embodiment of Depression-era legislation intended to enhance the City of Philadelphia's ability to address essential local needs and issues. See City & Cty. of Phila. v. Samuels , 338 Pa. 321, 324, 12 A.2d 79, 81 (1940) ("The [Sterling Act] was an expression of the legislative intention to increase the taxing power of the city," in light of "revenue difficulties" and "frequent appeals on behalf of the city ... made to the legislature").⁷ Although the statute was enacted during a time of a global economic crisis, it has remained substantively the same, as it pertains to Philadelphia, throughout the many decades that followed.⁸

This Court has described the Sterling Act as tax enabling legislation vesting in the City "an enormously broad and sweeping power of taxation." Nat'l Biscuit Co. , 374 Pa. at 610, 98 A.2d at 185. Although, at the same time, it was recognized that the City cannot duplicate the Commonwealth's imposition of a tax, see id. , we agree with a Justice's cautionary admonition that such limitation "must be seen in the light of the legislative intent of providing sources of revenue for impoverished cities." Tax Rev. Bd. v. Smith, Kline & French Labs. , 437 Pa. 197, 201, 262 A.2d 135, 137 (1970) (opinion announcing the judgment of the Court).

The relevant provisions of the Sterling Act are as follows:

[T]he council of any city of the first class shall have the authority ... to levy, assess and collect ... such taxes on persons, transactions, occupations, privileges, subjects and personal property ... as it shall determine, except that such council shall not have authority to levy, assess and collect ... any tax on a privilege, transaction, subject or occupation, or on personal property, which is now or may hereafter become subject to a State tax or license fee. If, subsequent to the passage of any ordinance under the authority of this act, the General Assembly shall impose a tax or license fee on any privilege, transaction, subject or occupation, or on personal property, taxed by any city of the first class hereunder, the act of the Assembly imposing the State tax thereon shall automatically vacate the city ordinance passed under the authority of this act as to all taxes accruing subsequent to the effective date of the act imposing the State tax or license fee. It is the intention of this section to confer upon cities of the first class the power to levy, assess and collect taxes upon any and all subjects of taxation which the Commonwealth has power to tax but which it does not now tax or license, subject only to the foregoing provisions that any tax upon a subject which the Commonwealth may hereafter tax or license shall automatically terminate upon the effective date of the State act imposing the new tax or license fee.

53 P.S. § 15971(a) (emphasis added).⁹

Consistent with the General Assembly's explicit statement of its intentions, expressed within the four corners of the Sterling Act, we agree with Appellees that the question in this case ultimately reduces to whether the Commonwealth has the power to tax -- but does not tax -- the supply, acquisition, delivery, or transport of beverages at the dealer/distributor level. See, e.g. , Brief for Appellees at 12. If so, the beverage tax imposed upon such transactions and/or subjects facially resides within the broad, general grant of autonomous taxing power available to the City per the Sterling Act. Significantly, however, Appellants offer no argument that the Commonwealth lacks this power.

Instead, Appellants' sole reference to the Legislature's explication of its own intentions proceeds as follows: "[T]hat sentence does not vary the main grant of taxing authority earlier in the subsection -- on the contrary, it is expressly 'subject ... to the foregoing provisions,' ... -- and it is not the sentence on which this Court has focused in Sterling Act cases." Reply Brief for Appellants at 5 n.1 (quoting 53 P.S. § 15971(a) ). To the degree that this Court has not previously focused on these specific terms of the Sterling Act, however, certainly such inattentiveness cannot mean that the Legislature's directions should be deemed to have been judicially nullified. In point of fact, we find that the statutory language in question operates to clarify the preceding terms of the enactment and, in our view, to alleviate any relevant ambiguity which might otherwise be present.

In terms of Appellants' contention that this material statement of the General Assembly has been made expressly "subject ... to the foregoing provisions," id. , such argument is premised upon the omission of material qualifying language. In this regard, the "subject only to" proviso of the Sterling Act serves solely to reinforce the power of the Legislature to supplant otherwise proper local taxes. 53 P.S. § 15971(a) ("It is the intention of this section to confer upon cities of the first class the power to levy, assess and collect taxes upon any and all subjects of taxation which the Commonwealth has power to tax but which it does not now tax or license, subject only to the foregoing provisions that any tax upon a subject which the Commonwealth may hereafter tax or license shall automatically terminate upon the effective date of the State act imposing the new tax or license fee. ") (emphasis added). Contrary to Appellants' position, the proviso does not function as an express qualification concerning the broader aspects of the Legislature's statement of its intentions.¹⁰

In our view, that statement strongly reinforces the legislative design of an expansive delegation of taxing power (subject to the Legislature's express reservation of the power to preempt through future legislation). Accord, e.g. , Nat'l Biscuit Co. , 374 Pa. at 610, 98 A.2d at 185. Significantly, moreover, particularly in the context of Pennsylvania's complex scheme of multi-jurisdictional taxation, the notion of duplicative taxation is highly amorphous. Cf. JOSEPH C. BRIGHT , 27 SUMM. PA. JURIS . 2D TAXATION § 14:5 (2018) ("Economic double taxation is ... impossible to avoid under a system of partially delegated taxing powers[.]"). For example, the phenomenon of tax pyramiding is sometimes referred to as a form of duplicative taxation, see, e.g. , BRIGHT , 26 SUMM. PA. JURIS. 2D TAXATION § 7:3, and, in other instances, distinguished from duplication. See, e.g. , A.B. Hirschfeld Press, Inc. v. City and Cty. of Denver , 806 P.2d 917, 924 (Colo. 1991) (en banc ) ("The mere pyramiding of taxes on an item as it flows through commercial channels does not in itself constitute double taxation." (citations omitted) ).¹¹ We find it to be unlikely that the Legislature would have intended for such a malleable concept, in the broader economic sense at least, to serve as an unexpressed limitation upon its delegation of taxing power to a local government unit.

Relatedly, we credit Appellees' position that tax duplication, for purposes of the Sterling Act, turns on legal -- and not economic -- incidence. Significantly, this Court has rejected an economic incidence test in determining the nature of a tax in analogous contexts. For instance, in John Wanamaker, Philadelphia v. School District of Philadelphia, 441 Pa. 567, 274 A.2d 524 (1971), the Court recognized that "economically the incidence of" a local tax imposed on the use of commercial and industrial property fell upon the property itself. Id. at 575, 274 A.2d at 527. Nevertheless, the Court found that the legal incidence -- and hence, the "true nature" of the tax -- was on the privilege of using the property, rendering the tax "a true excise tax." Id. at 575, 577, 274 A.2d at 527, 529.¹² Notably as well, in the tax immunity setting, federal courts have been resolutely instructed to avoid the "venturesome" and "daunting" inquiry into economic incidence. Oklahoma Tax Comm'n v. Chickasaw Nation , 515 U.S. 450, 459-60, 115 S.Ct. 2214, 2221, 132 L.Ed.2d 400 (1995). According to the Supreme Court of the United States: "If we were to make 'economic reality' our guide, we might be obliged to consider, for example, how completely retailers can pass along tax increases without sacrificing sales volume -- a complicated matter dependent on the characteristics of the market for the relevant product." Id.

We discern no evidence from the text of the Sterling Act suggesting that Pennsylvania courts are to embark upon such an inquiry into economic incidence for purposes of evaluating the permissibility of local taxes. Indeed, had the Legislature wished for the courts to eschew the "reasonably bright-line standard" of a legal-incidence litmus, id. at 460, 115 S.Ct. at 2221 (citation omitted), it would have been a simple matter for the Assembly to have so provided. See generally HELLERSTEIN, STATE TAXATION ¶ 17.06 (2018) ("State court decisions and administrative regulations generally follow the same line of analysis articulated [in Gurley ] -- that is, the legal incidence of the tax falls on the entity who has the legal obligation to pay it, even if the entity has passed on the economic burden of the tax to others.").¹³

II. Application of the Sterling Act's Preemption Provisions

Appellants and a number of their amici suggest, with varying degrees of directness, that this Court should deem "beverages" to be the overarching subject of both the state sales and use tax and the City's beverage tax for Sterling Act purposes. As we understand this position, the premise is that each one of the discrete range of "persons, transactions, occupations, privileges, subjects and personal property" within the scope of the Sterling Act should be bundled into an overarching subject-matter category, which the City is prohibited from reaching. See 53 P.S. § 15971(a).

In many decisions, however, this Court has looked to a far more "precise inciden[ce]" to determine the nature of a tax. John Wanamaker, 441 Pa. at 574, 274 A.2d at 527. Without this closer focus, for example, the Court could never have approved the use tax pertaining to commercial and industrial property at issue in the John Wanamaker case over and against a Uniformity Clause challenge. See supra note 12 and accompanying text. In a case arising under the Sterling Act, this Court sanctioned a City tax pertaining to the transfer of realty, despite the Commonwealth's imposition of a contemporaneous tax, on the theory that the former was a tax on "transactions" and the latter on "documents." See L.J.W. Realty Corp. v. City of Phila. , 390 Pa. 197, 202-03, 134 A.2d 878, 881-82 (1957). Abandonment of a legal-incidence test in favor of a subject-matter focus on "realty" -- or even upon the particular transaction in issue -- would obviously undermine the decision in its entirety.

If the Court were to adopt a broad subject-matter litmus, Sterling Act cases distinguishing state and city taxes on related subjects as entailing "property" versus "excise" would also be rendered incoherent. See, e.g. , Samuels , 338 Pa. at 326, 12 A.2d at 82 (distinguishing a City tax measured by gross receipts generated from parking lots from the state corporate net income tax, although both could be said to apply to "parking" or "parking lots"). And certainly the concept of distinguishing business privilege and mercantile tax from other forms of taxation measured by profits depends upon a legal-incidence assessment independent of a broader, overlapping subject-matter frame of reference. See, e.g. , Nat'l Biscuit Co. , 374 Pa. at 614, 98 A.2d at 187 (holding that payment of the state corporate income tax and other taxes does not bar the City, under the Sterling Act, from exacting a mercantile tax measured by the gross volume of business); Fed. Drug Co. v. City of Pittsburgh , 358 Pa. 454, 457-58, 57 A.2d 849, 850-51 (1948) (differentiating a municipal mercantile license tax from the state foreign corporate franchise and corporate net income taxes, although all applied to "businesses"); Blauner's, Inc. , 330 Pa. at 346, 198 A. at 892 (determining that a City sales tax did not duplicate a state mercantile license tax, since the City taxed sales whereas the Commonwealth taxed the privilege of conducting business, notwithstanding that both taxes were measured by gross receipts).¹⁴

Notably, the Court has observed that matters that are distinct, for instance at a transactional level, can often be described as having a single subject "if the point of view be carried back far enough." Commonwealth v. Neiman , 624 Pa. 53, 69, 84 A.3d 603, 612 (2013) (quoting Pennsylvanians Against Gambling Expansion Fund, Inc. v. Commonwealth , 583 Pa. 275, 296, 877 A.2d 383, 395 (2005) ). Overlaying such a frame of reference upon the Sterling Act would obviously subvert the General Assembly's conferral of broad taxing authority to the City.

Consistent with the above decisions, we read the Sterling Act as permitting the City to tax a wide range of "persons, transactions, occupations, privileges, subjects and personal property," 53 P.S. § 15971(a), and the preemption provisions as constraining such authority only where the Commonwealth has already imposed a tax having the same legal incidence relative to the same discrete "persons, transactions, occupations, privileges, subjects and personal property." Id. In this regard, the Legislature's use of the term "subjects" within the litany does not displace the legal-incidence test, but rather, serves, in the first instance, to establish the statute's broad scope, and in later instances as a reference back to the appropriate (or, relative to preemption, otherwise appropriate) "subjects of taxation ," id . (emphasis added).¹⁵ Cf. V.L. Rendina, Inc. , 595 Pa. at 418-19, 938 A.2d at 995.

Turning to a discrete analysis of the legal incidences of the Commonwealth sales and use tax as compared to the City's beverage tax, we agree with the assessments of the common pleas and intermediate courts. Briefly, the state tax is upon "sale[s] at retail," 72 P.S. § 7202(a) ; is measured by purchase price, see id. § 7203; and falls directly upon consumers, albeit that retailers serve to collect the tax for the benefit of the Commonwealth, see id. § 7202(a).¹⁶

The beverage tax, on the other hand, applies to distributor/dealer-level transactions (and/or subjects) made with the purpose of the dealer "holding [the beverage] out for retail sale" in Philadelphia, but independent of whether any retail sale actually occurs. PHILA. CODE § 19-4103(1). The measure is the volume of fluid ounces of beverages distributed between the distributor and dealer. Id. § 19-4103(2)(a). The payer of the beverage tax is the distributor, or in certain circumstances, dealers, see id. §§ 19-4107(2), 19-4105(2), but never the purchasing consumer.¹⁷

Based on the above, we agree with Appellees the taxes have different subjects, measures, and payers, and accordingly, distinct legal incidences. Accord Williams , 164 A.3d at 586-88 ; Williams , No. 1452 Sept. Term 2016, slip op. at 6-7.

We are cognizant of the retail sales nexus integrated into the beverage tax, presumably to establish the essential geographic connection for jurisdictional purposes. See 53 P.S. § 15971(a) (granting Philadelphia the authority to levy taxes on authorized subjects "within the limits of such city of the first class").¹⁸ We conclude, however, that this connection does not convert what is otherwise a distributor/dealer level tax into a retail sales tax.¹⁹

III. United Tavern Owners

As previously noted, a strong focus has been placed, in this litigation, on the opinion announcing the judgment of the Court in United Tavern Owners of Philadelphia , 441 Pa. 274, 272 A.2d 868. See supra note 3.

In that case, the City enacted an ordinance authorizing a ten-percent local tax on the retail sale of liquor in Philadelphia's hotels, restaurants, taverns, and clubs. The Commonwealth already had imposed its general six-percent sales tax on liquor, as well as an eighteen-percent tax on liquor sold by the state liquor control board. The state's two taxes, however, unlike Philadelphia's alcohol retail sales tax, were collected when the beverages were transferred from distributor to retailer. This Court nonetheless invalidated the tax under the Sterling Act. The lead opinion, supported by a single Justice, stated: "We hold today that because the sales of liquor are already subject to two state taxes, the state has preempted the specific field of liquor sales for taxation purposes and Philadelphia is barred from enacting the ordinance in question." Id. at 284, 272 A.2d at 873.

The parties dispute the applicability of United Tavern Owners in terms of both the precedential value of a non-majority opinion and the applicability of the lead opinion's reasoning. We find Appellees to have the better part of the argument on both points. "It is axiomatic that a plurality opinion of this court is without precedential authority[.]" CRY, Inc. v. Mill Serv., Inc. , 536 Pa. 462, 469 n.3, 640 A.2d 372, 376 n.3 (1994). Furthermore, while there are certainly kernels in the lead opinion suggesting that the author would likely tend toward Appellants' position here, the reasoning is also bound up in discrete concerns pertaining to the Commonwealth's pervasive regulation of liquor. See United Tavern Owners , 441 Pa. at 284, 272 A.2d at 873.

IV. Policy

Finally, we respond as follows to Appellants' assertion that a Sterling Act preemption threshold that permits the City to tax upstream transactions or subjects allows too much room for local manipulation. See, e.g. , Brief for Appellants at 14 ("Municipalities around the Commonwealth are watching to see whether the Court will accept the City's novel argument that municipalities can impose new taxes on top of existing sales taxes -- at whatever by-volume rate they please -- so long as they couch those taxes as distribution transaction taxes."). The concern that unintended consequences may unfold are prevalent relative to the promulgation of experimental, remedial legislation such as the Sterling Act. Where the language of the governing statute is clear (or clear enough), however, the solution is legislative -- and not judicial -- adjustment.²⁰ In this regard, this Court regularly alludes to the superior resources available to the General Assembly in assessing matters of social policy.²¹

Indeed, the history of the treatment of the taxing power of Pennsylvania municipalities at large provides a ready example. In 1947, the General Assembly enacted a law conferring on the broader range of municipalities a power to tax so expansive that the enactment soon became known as the "Tax Anything" law. See Act of June 25, 1947, P.L. 1145. See generally PA. DEP'T OF COMMUNITY AFFAIRS, TAXATION MANUAL § IX at 27 (2002) ("The original enactment[, like the Sterling Act,] excluded from local taxing power subjects of taxation preempted by state taxation, but otherwise had few restrictions."); James A. Moore, The "Home Rule" Tax Act -- A Solution or a Challenge? , 97 U. PA. L. REV. 811, 814 (1949) (characterizing the "Tax Anything" enactment, like the Sterling Act, as "a delegation of the state's unused taxing powers to the subdivisions, giving them the responsibility of raising their own revenue in the way they saw fit."). Subsequently, however, with experience, the Legislature imposed a plethora of restrictions, more recently, within the successor statute known as the Local Tax Enabling Act.²² See TAXATION MANUAL § IX at 27 ("The broad general taxing power of the original [embodiment of the LTEA] has been increasingly circumscribed by legislative amendments and court decisions to the point where the Act is now primarily an express grant of power to levy certain taxes with maximum rates set by the legislature.").

For whatever reason, however, the General Assembly has left extant the "enormously broad and sweeping power of taxation" granted to the City by the Sterling Act. Nat'l Biscuit Co. , 374 Pa. at 610, 98 A.2d at 185. Subject to constitutional limitations, of course, the Legislature remains free to modify this state of affairs, as it has relative to other municipalities.

V. Summary and Conclusion

In summary, the Sterling Act conferred upon the City of Philadelphia a broad taxing power subject to preemption, while clarifying that "any and all subjects" are available for local taxation which the Commonwealth could, but does not presently, tax. 53 P.S. § 15971(a). The Commonwealth could, but does not, tax the distributor/dealer-level transactions or subjects targeted by the beverage tax. Moreover, the legal incidences of the Philadelphia tax and the Commonwealth's sales and use tax are different and, accordingly, Sterling Act preemption does not apply.

The order of the Commonwealth Court is affirmed.

Justices Baer, Todd and Donohue join the opinion.

Justice Wecht files a dissenting opinion.

Justice Mundy files a dissenting opinion.

Justice Dougherty did not participate in the consideration or decision of this case.

1 Act of August 5, 1932, Ex. Sess., P.L. 45 (as amended 53 P.S. §§ 15971 -15973 ).

2 Conversely, tax exemptions are generally construed in favor of the taxing authority. See 1 Pa.C.S. § 1928(b)(5).

3 The Commonwealth Court majority and the dissent also debated the significance of the opinion announcing the judgment of the Court in United Tavern Owners of Philadelphia v. School District of Philadelphia , 441 Pa. 274, 272 A.2d 868 (1971). We have elected to reserve the discussion of that case for our analysis, below.

4 Appellees' preliminary objections were in the nature of a demurrer, which presents the question of "whether, on the facts averred, 'the law says with certainty that no recovery is possible.' If doubt exists concerning whether the demurrer should be sustained then 'this doubt should be resolved in favor of overruling it.' " Bruno v. Erie Ins. Co. , 630 Pa. 79, 91, 106 A.3d 48, 56 (2014) (citations omitted). Both parties advocate that their respective interpretations of the Sterling Act can be fully vindicated at this juncture, and ultimately, we conclude that there are no factual differences that preclude a final determination on our part.

5 Numerous amici have filed briefs in support of Appellants' position, including a group of 34 Pennsylvania legislators; the Teamsters Local Union No. 830 and the Pennsylvania Conference of Teamsters; and the National Federation of Independent Business Small Business Legal Center, Pennsylvania Chamber of Business and Industry, Pennsylvania Restaurant and Lodging Association, Pennsylvania Retailers Association, National Association of Theatre Owners, and Tri-State Automatic Merchandising Council.

6 Amici favoring Appellees' position include: The Sustainable Business Network of Greater Philadelphia; the International Municipal Lawyers Association; Public Citizens for Children & Youth, CEIBA, Inc., the Delaware Valley Association for the Education of Young Children, and Public Health Management Corporation; the Philadelphia Parks Alliance; African-American Chamber of Commerce for Pennsylvania, New Jersey & Delaware; Philadelphia Opportunities Industrialization Center, Inc.; City of Berkeley, California; the American Heart Association, American Cancer Society Cancer Action Network, American Medical Association, Food Trust, Healthy Food America, Momsrising.org, National Alliance for Hispanic Health, National Association of Chronic Disease Directors, National Association of County and City Health Officials, National Association of Local Boards of Health, Notah Begay III Foundation, Pennsylvania Association of Staff Nurses and Allied Professionals, Pennsylvania Medical Society, Philadelphia County Medical Society, Physicians for Social Responsibility Philadelphia, and Public Health Law Center; and Changelab Solutions, Children's Defense Fund, Highscope Educational Research Foundation, Pennsylvania Association for the Education of Young Children, and Pennsylvania Child Care Association.

Various of these amici focus on broader social policy issues regarding asserted benefits of the beverage tax in combatting adverse health effects and funding local programs for the benefit of the public at large and, particularly, vulnerable populations. Our analysis here, however, is centered upon the issue of statutory interpretation on which the appeal was allowed.

7 See generally Brief for Amicus Int'l Mun. Lawyers Ass'n at 4 ("Historically, Pennsylvania and its political subdivisions relied almost exclusively on real estate taxes, but the depression aggravated other developing problems from the Industrial Revolution and brought the need for increased revenue. To alleviate the persistent financial strain, 'the 1930's witnessed the beginning of attempts to broaden local taxing powers.' " (quoting Advisory Comm'n on Intergovernmental Relations, A-14, State Constitutional and Statutory Restrictions on Local Taxing Powers 74 (1962) ) ).

8 The statute originally applied to both first- and second-class cities, but the authority extended to the latter expired, and the enactment was amended in 1961 solely to exclude references to second-class cities. See Act of July 26, 1961, P.L. 904, § 1. This is the only modification made during the statute's eighty-six-year history.

9 Regarding the statute's delineation of "persons, transactions, occupations, privileges, subjects, and personal property" subject to taxation, the litigants agree that the Legislature utilized terms that are broad, overlapping, and imprecise to capture a wide range of subject matter. See, e.g. , Brief for Appellants at 16 (quoting V.L. Rendina, Inc. v. City of Harrisburg , 595 Pa. 407, 418-19, 938 A.2d 988, 995 (2007) ).

To facilitate the present focus, we note that we have omitted the geographic nexus of the Sterling Act from the above quote. That aspect is discussed independently below. See, e.g. , infra note 18.

10 Indeed, in a statute concerning the taxing authority of certain municipalities other than the City of Philadelphia, the General Assembly has demonstrated that it knows well how to subordinate a statement of its intentions more generally, where it wishes to do so. See 53 P.S. § 6924.305 (repealed in part) ("It is the intention of this section to confer upon such political subdivision the power to levy, assess and collect taxes upon any and all subjects of taxation, except as above restricted and limited ...." (emphasis added) ). The Legislature's approach of refraining from so qualifying its statement of intentions in the Sterling Act represents yet another manifestation of its design to afford expansive taxing power to the City. See generally infra Part IV.

11 In Commonwealth v. Wetzel , 435 Pa. 468, 257 A.2d 538 (1969), this Court referred to a pyramiding effect as double taxation. See id. at 471-72, 257 A.2d at 539. The treatment on this point, however, was at a high level of abstraction and, in any event, the case did not concern the interrelationship of taxes by multiple governmental units.

12 This determination was central to the Court's holding that the tax did not violate the Uniformity Clause of the Pennsylvania Constitution, in light of the fact that it imposed a differential tax on commercial and industrial realty as compared with residential property. See generally Valley Forge Towers Apts. N, LP v. Upper Merion Area Sch. Dist. , 640 Pa. 489, 497 n.4, 163 A.3d 962, 967 n.4 (2017).

13 We realize that this Court refers to the "practical operation of the two taxes [claimed to be duplicative] as against mere difference in terminology from time to time employed in describing taxes in various cases." Murray , 364 Pa. at 165, 71 A.2d at 284. Appellants have pointed to no decision of this Court, however, that interprets this reference to a statute's or ordinance's implementation mechanics to subsume an economic incidence analysis encompassing consideration of post-tax economic reactions such as a downstream displacement, by private actors, of the burden of a tax. Accord Williams , 164 A.3d at 586 ("[A] tax's 'operation or incidence' refers to the substantive text of the ordinance and does not concern the post-tax economic actions of private actors[.]" (quoting, indirectly, Nat'l Biscuit Co. , 390 Pa. at 652, 136 A.2d at 825 ) ).

Our present decision relative to the applicability of a legal incidence standard is tethered to the Sterling Act. We recognize that, in some other settings, consideration of economic incidence may be necessary. See, e.g. , Camps Newfound/Owatonna, Inc. v. Town of Harrison , 520 U.S. 564, 580, 117 S.Ct. 1590, 1600, 137 L.Ed.2d 852 (1997) (discussing the relevance of economic incidence in federal Commerce Clause cases regarding discrimination by state taxing authorities).

14 We are under no illusion concerning the intuitiveness and cohesiveness of the decisions in the Sterling Act line on various points. See Reply Brief for Appellants at 7 ("[F]or every case that the City cites, one can readily find a different case that finds impermissible duplication despite certain differences between the state and local taxes."); City of Phila. v. Tax Rev. Bd. , 144 Pa. Cmwlth. 374, 379, 601 A.2d 875, 877 (1992) ("[I]t is difficult to extract a comprehensive analysis to be used whenever preemption of local taxation is claimed."); Bright , 27 Summ. Pa. Juris . 2D Taxation § 14:5 (depicting "a body of case law which regrettably is not a reliable basis from which to predict whether any particular tax will be preempted"). It is our aspiration that the legal incidence analysis offered herein will provide at least a modicum of clarification.

15 Notably, throughout the titles, headings, and text of the Laws of Pennsylvania, the Legislature has frequently employed the term "subjects of taxation" as a term of art to capture a range of things upon which the legal incidence of taxation is or may be placed. See, e.g. , 72 P.S. § 7101, Historical and Statutory Notes (reflecting that, in the title of the Tax Reform Code of 1971, the General Assembly depicted the enactment as codifying and enumerating certain "subjects of taxation" and imposing taxes thereon). Indeed, the term appears in the Pennsylvania Constitution in the same sense. See Pa. Const. , art. VIII, § 2 (b)(2) (authorizing the Legislature to establish a special class or classes of "subjects of taxation" for exemption purposes).

Accordingly, and as explained in the text above, in the context of the Sterling Act it is plain that "subjects of taxation" means the "persons, transactions, occupations, privileges, subjects and personal property" that the statute otherwise and expressly permits the City to tax. And, again, it is dispositive here that the Legislature has specified that it is its intention to permit the City to tax "all subjects of taxation" that the Commonwealth has the power to but does not tax, "subject only to the foregoing provisions" pertaining to future displacement of local tax by a new state levy. 53 P.S. § 15971(a) (emphasis added).

16 The statute makes clear that "sale at retail" does not include "any such transfer of tangible personal property or rendition of service for the purpose of resale." Id. § 7201(k)(8); see id. § 7202(a). The fact that the Commonwealth has voluntarily implemented an internal, anti-pyramiding mechanism relative to its own collection of retail sales tax does not, in our view, serve as a restriction on the City's authority to impose taxes at the distributor/dealer level, under the Sterling Act, that may perhaps be passed along to the consumer and, accordingly, be subject to the state sales and use tax. Again, Appellants offer nothing to suggest that the Commonwealth could not impose a tax at the distributor/dealer level. See 53 P.S. § 15971(a) ("It is the intention of this section to confer upon cities of the first class the power to levy, assess and collect taxes upon any and all subjects of taxation which the Commonwealth has power to tax but which it does not now tax ....").

17 Throughout his dissenting opinion, Justice Wecht attributes particular motivations to City Council in its enactment of the beverage tax. See, e.g. , Dissenting Opinion, 439-41, 444-46. For our part, we remain with the sentiment of the Court, expressed long ago, that, in determining whether the City has authority to levy a tax in the manner and form in which it was imposed, "[w ]e have nothing to do with .... the purpose of its levy. " Blauner's, Inc. , 330 Pa. at 344, 198 A. at 891 (emphasis added); accord Gurley , 421 U.S. at 206-07, 95 S.Ct. at 1610 (explaining that statements by executive officials pertaining to downstream displacements of economic incidence were not relevant to determining the legal incidence of the relevant tax). In this regard, we also credit Appellees' argument, as follows:

[A]ssumptions regarding a unified, clear legislative intent to cause a particular post-tax economic reaction are misplaced. The [beverage tax] is a general revenue raising measure, and individual Councilmembers were free to vote for the [tax] because of -- or even in spite of -- countless policy considerations, such as raising general monies, enabling thousands of pre-K seats, improving community and recreational facilities, and/or the effect of market forces on consumer behavior and health.

Brief for Appellee at 30.

18 At several locations within their briefs, Appellants observe that the beverage tax's applicability does not depend upon whether any distribution transactions take place in Philadelphia, see, e.g. , Brief for Appellants at 17, thus suggesting that the tax may impermissibly reach extraterritorial activity. See 53 P.S. § 15971(a) (authorizing local taxation of appropriate subjects of taxation "within the limits of" the City). Appellants explain, however, that they have not raised this point to challenge particular applications of the tax, see Reply Brief for Appellants at 8, but to emphasize that "the connection that the Tax draws between soft drink commerce and the City's geographic boundaries is at the retail level, not the distribution level." Brief for Appellants at 18. We have otherwise responded to this argument. Regarding the extraterritorial issue as such, as Appellees explain, such a challenge would represent an as-applied one to particular applications of the beverage tax rather than implicating our consideration of the claim of facial invalidity that Appellants pursue at present.

19 Given our determination that the beverage tax survives scrutiny under a plain meaning application of the Sterling Act, the policy of strict construction of taxing statutes does not pertain to this case.

20 Notably, the argument has also been made that a broad construction of Sterling Act preemption may yield unfavorable social policy, in that such a reading disregards the economic reality inherent in a delegation to tax at the local level and encourages "second-rate taxes, administrative wastefulness, and litigation." Bright , 27 Summ. Pa. Juris . 2D Taxation § 14:5.

21 See, e.g. , Official Comm. of Unsecured Creditors of Allegheny Health Educ. & Research Found. v. PriceWaterhouseCoopers, LLP, 605 Pa. 269, 301 & n.27, 989 A.2d 313, 333 & n.27 (2010) (referencing the broader tools available to the legislative branch, such as policy hearings and comprehensive investigations); Naylor v. Twp. of Hellam , 565 Pa. 397, 408, 773 A.2d 770, 777 (2001) (recognizing the General Assembly's superior ability to examine social policy issues and determine legal standards so as to balance competing concerns); Program Admin. Servs., Inc. v. Dauphin Cty. Gen. Auth ., 593 Pa. 184, 192, 928 A.2d 1013, 1017-18 (2007) ("[I]t is the Legislature's chief function to set public policy and the courts' role to enforce that policy, subject to constitutional limitations.").

22 Act of Dec. 31, 1965, P.L. 1257 (as amended 53 P.S. §§ 6924.101 -6924.901 ) (the "LTEA").

JUSTICE WECHT, DISSENTING

I agree with the doctrinal framework set forth by the learned Majority, which invokes the legislative intent we have previously discerned in the Sterling Act¹ to grant the City of Philadelphia the widest practicable local taxing authority, provided that it does not constructively duplicate a state-imposed tax. That is to say, I agree broadly with the Majority's reaffirmation of the "incidence test" articulated by this Court in Commonwealth v. National Biscuit Co. , 390 Pa. 642, 136 A.2d 821, 825-26 (1957) (hereinafter, " Nabisco "² ). I part ways with the Majority in its conclusion that Philadelphia's Sugar-Sweetened Beverage Tax ("PBT") passes muster under that test. Thus, I respectfully dissent.

In the Sterling Act, our General Assembly stated: "It is the intention of this section to confer upon cities of the first class [i.e. , Philadelphia] the power to levy, assess and collect taxes upon any and all subjects of taxation which the Commonwealth has power to tax but which it does not now tax or license." 53 P.S. § 15971(a). The General Assembly then described and limited this taxing authority as follows:

[T]he council of any city of the first class shall have the authority by ordinance, for general revenue purposes, to levy, assess and collect, or provide for the levying, assessment and collection of, such taxes on persons, transactions, occupations, privileges, subjects and personal property, within the limits of such city of the first class, as it shall determine, except that such council shall not have authority to levy, assess and collect ... any tax on a privilege, transaction, subject or occupation, or on personal property, which is now or may hereafter become subject to a State tax or license fee.

Id. This Court long has perceived the Sterling Act's grant of taxing authority to Philadelphia to be quite broad, ensuring since the time of the law's Depression-era enactment that Philadelphia has revenue power sufficiently robust to enable it to address the peculiar challenges it faces as our most populous city. See Maj. Op. at 428-29 (citing Nat'l Biscuit Co. v. City of Phila. , 374 Pa. 604, 98 A.2d 182, 185 (1953) ; City & Cty. of Phila. v. Samuels , 338 Pa. 321, 12 A.2d 79, 81 (1940) ).

I have no quarrel with this paradigm. But it cannot be stretched to the point that the legislative ban on duplicate taxation is ignored or read out of the law. In nominally levying a tax imposed by volume upon the distribution of sugar-sweetened beverages ("SSBs")³ for retail sale, the Philadelphia City Council knowingly and intentionally burdened end-consumers of SSBs in what amounts to a tax that duplicates the Commonwealth sales tax upon the same broad category of beverages.⁴ The evidence lies not only in the text and structure of the PBT itself, but also in the process by which the City considered, drafted, and refined the legislation.

* * * *

As I dig more deeply into the PBT, I am compelled to greet skeptically the characterization of the PBT as a "distribution" tax in the first instance. The PBT, enacted by dint of the Sterling Act's grant of authority, defines a distributor as "[a]ny person who supplies sugar-sweetened beverage to a dealer." PHILA. CODE § 19-4101(2). A dealer, in turn, is "[a]ny person engaged in the business of selling sugar-sweetened beverage for retail sale within the City." Id. § 19-4101(1). However, Section 19-4103 makes clear by its language that the tax in fact is not directed at distribution as such . Rather, the tax is imposed upon the following:

[T]he supply of any sugar-sweetened beverage to a dealer; the acquisition of any sugar-sweetened beverage by a dealer; the delivery to a dealer in the City of any sugar-sweetened beverage; and the transport of any sugar-sweetened beverage into the City by a dealer. The tax is imposed only when the supply, acquisition, delivery or transport is for the purpose of the dealer's holding out for retail sale within the City the sugar-sweetened beverage or any beverage produced therefrom.

Id. § 19-4103(1) (emphasis added). This broad list of taxable activities-supply, acquisition, delivery, and transport-encompasses by implication distribution in its common sense, but effectively and exclusively captures any logistical activity that serves the end goal of retail sale of an SSB.

Notably, Subsection 19-4103(1), the core grant of authority in this putative "distribution" tax, does not even use the word "distribution" or refer by its terms to a "distributor." Nonetheless, the express terms delineating taxable activities ensure that a distributor can be taxed, wherever it is found, wherever its transaction with a Philadelphia dealer occurs. But when a distributor cannot be taxed, for example because one cannot be identified or has failed to provide the dealer with proof of registration, then the dealer will be. See , e.g. , id. § 19-4107(1). Indeed, no distribution in the conventional sense need occur for the tax to come due. Rather, by design, the PBT ensures that the levy is imposed once upon every SSB that is held out for retail sale in Philadelphia. See , e.g. , id. § 19-4105(3) (protecting against double imposition of the tax upon a "distributor/dealer" under circumstances where "the tax already has been imposed on the supply or delivery of the beverage to the dealer/distributor or the acquisition of the beverage by the dealer/distributor"). While the cost most frequently may be borne by distributors, it applies whether or not a distributor is involved. Thus, the PBT effectively is tied not to distribution itself, but rather to any activity that contributes specifically and exclusively to the supply of SSBs intended for retail sale within the City.

We also must bear in mind the effect of the limitation of the Sterling Act's taxing authority to "persons, transactions, occupations, privileges, subjects and personal property, within the limits of such city of the first class ." 53 P.S. § 15971(a) (emphasis added). If the PBT can affect distribution or procurement outside Philadelphia-if, for example, a dealer leaves Philadelphia to obtain SSBs with the intent to transport those SSBs back into the City for retail-it is unclear how that extraterritorial transaction can be taxed under a provision that permits taxation only within the city limits. In fact, the only understanding of the activity to be taxed that respects and adheres to the statutorily required geographical nexus with Philadelphia is that it applies inexorably to the offering of SSBs for sale at retail in the City. Thus, for the PBT to be understood consistently with the Sterling Act's authority, we again must conclude that the tax by design targets retail sales of SSBs.

These textually-driven inferences are difficult to dispute. Moreover, they are reinforced by the history of the drafting, refinement, and enactment of the PBT, and by a review of the process through which SSBs, rather than some other category of retail commerce or economic activity, were selected as the source of the revenue that Philadelphia tapped in order to fund improvements in early childhood education. The City Council was well aware that much of the cost of the tax, wherever in the supply chain it was to be assessed, would be passed through in significant part to the consumer. Indeed, Council's revenue projections incorporated the conservative assumption that sales of SSBs would drop by 55% as a consequence of the tax's expected impact on retail prices.⁵ Time and again, in meetings of the Committee of the Whole, Council heard from both citizens and public officials that the PBT would reduce consumption of SSBs and that this would have a salutary effect both city-wide and specifically in and on the very communities that would receive revenues needed to fund new educational opportunities.

Relevantly, at the March 29, 2016 Committee Hearing, the Mayor's Chief of Staff signaled her familiarity with other cities' experiences with the imposition of similar taxes, vis-à-vis whether and to what extent the cost of the tax would be passed on from the distributor to the consumer. She and the City's Finance Director both attested that, in those other cities, roughly half of the new tax burden reached the consumer.⁶ The Mayor's Chief of Staff also underscored the expectation that the tax would affect consumer behavior when she emphasized that "part of the idea is that people will also have a choice to make here and they can change to other beverage consumption."⁷ At subsequent meetings, various public comments were received concerning the public health benefits associated with reducing SSB consumption.⁸ Indeed, Philadelphia's Public Health Commissioner testified emphatically regarding his Department's support of "[w]hatever is going to reduce that consumption [of SSBs] the most," noting that the communities within which SSB consumption is most prevalent are also those low-income communities that would be most sensitive to increased prices and most likely to reduce consumption in the face of price increases.⁹

In a recorded and transcribed April 7, 2016 conversation¹⁰ with Michael Smerconish, Mayor Jim Kenney echoed these themes. The Mayor made clear that his focus in advancing the PBT was to generate revenue for the various educational programs slated to receive the proceeds of the levy. Mayor Kenney also acknowledged that a substantial portion of the tax burden would be borne by the consumer. With respect to the prospect that the tax burden would be passed on, the Mayor stated that, if a consumer is "mad at Jim Kenney because he raised the tax on sugary sweet beverages, [the consumer] can choose not to buy that item." Interview by Michael Smerconish (April 7, 2016). Mayor Kenney suggested that the consumer might select a "healthy choice" instead. Id. The Mayor continued to emphasize the element of consumer choice, and invoked the beverage tax experience of Berkeley, California, where approximately half of the levy's burden had reached consumers. Confronted with accusations that the tax was a "nanny state" measure, Mayor Kenney responded as follows:

Well we're not a nanny state. We're a city with a large poor population that costs us money in many different ways. If you look at the cost of our prisons, the cost of prosecuting crime, the cost of fighting crime, the cost-the unreimbursed costs of health issues like diabetes and other things , we pay in the end anyway.

Id. (emphasis added). Finally, after underscoring the benefits of the universal pre-K

opportunities to be funded by PBT revenues, Mayor Kenney again emphasized the "ancillary health benefits which are terrific, if people start drinking less sugar-sweetened beverages." Id.

Thus, speaking generally, the many official and public discussions that occurred during the preparation and enactment of the PBT expressly invoked both the virtues of the educational opportunities to be funded and the health benefits to be realized from deterring SSB consumption, specifically by way of the anticipated pass-through of a portion of the tax burden to the consumer in the form of higher retail prices. Although great consideration was given to the direct beneficiaries of the anticipated tax revenues, attention also was directed to the public health benefit associated with reducing obesity and other conditions caused or exacerbated by consumption of SSBs. Significantly, at various times and in various ways, that benefit was cited to justify taxing SSBs, rather than some other category of commerce or retail item, in order to fund universal pre-K.

* * * *

It is against this legal and circumstantial backdrop that this Court must determine the validity of the PBT. In doing so, we cannot overlook our historically strict approach in construing the scope of the taxing power conferred upon local governments by the General Assembly, in this case by the Sterling Act:

[I]t is a principle universally declared and admitted that municipal corporations can levy no taxes, general or special, upon inhabitants, or their property, unless the power be plainly and unmistakably conferred. And the grant of such right is to be strictly construed, and not extended by implication.... In cases of doubt the construction should be against the government.

Murray v. City of Phila. , 364 Pa. 157, 71 A.2d 280, 283 (1950). The Murray Court brought this principle to bear on whether the tax there at issue exceeded the Sterling Act's authorization by amounting to "double taxation of the same thing." Id. at 284. This Court noted that, "[i]n determining whether double taxation results, whether the city tax conflicts with that imposed by the state [for Sterling Act purposes], the practical operation of the two taxes is controlling as against a mere difference in terminology from time to time employed in describing taxes in various cases." Id. (emphasis added).

Our approach to examining whether a new local tax is duplicative under the Sterling Act has remained practical, perhaps to a fault, as illustrated by the Majority's brief effort to demonstrate how the incidence test brings our disparate case law into harmony, an effort that, unsurprisingly, yields a pointillist account revealing no clear motif. See Maj. Op. at 433 n.14 (confessing that "[w]e are under no illusion concerning the intuitiveness and cohesiveness of the decisions in the Sterling Act line on various points.").¹¹ The acknowledged elusiveness of clear guidance is most evident in this Court's failure long ago to reach even the shadow of consensus in deciding United Tavern Owners of Philadelphia , 441 Pa. 274, 272 A.2d 868 (1971), the case whose facts most closely resemble those before us today.¹²

These caveats aside, I have no objection to the Majority's first interpretive step, which focuses upon the utility of Nabisco 's"incidence test." Echoing Murray , the Nabisco Court described the test as follows:

In determining whether a tax duplicates another tax and results in double taxation prohibited to local taxing authorities, the operation or incidence of the two taxes is controlling as against mere differences in terminology from time to time employed in describing taxes in various cases. The incidence of a tax embraces the subject matter thereof and, more important, the measure of the tax, i.e., the base or yardstick by which the tax is applied .

Nabisco , 136 A.2d at 825-26 (emphasis added). The Majority describes this principle as the "legal incidence" test. In so many words, the legal incidence test asks what is taxed and how that "it" is taxed.

The Majority distinguishes the legal incidence test from what it calls the "economic incidence" test. The Majority notes that, in Jon Wanamaker, Philadelphia v. School District of Philadelphia , 441 Pa. 567, 274 A.2d 524 (1971), this Court distinguished between the "economic incidence" of a local tax imposed upon the use of commercial and industrial property, which fell upon the property, and the legal incidence, which was driven not by the property itself but by its use. Relative to this case, the Majority implies, an economic incidence test would concern itself with whether what appears as a distribution tax in fact amounts to a sales tax-as asserted by the Plaintiff-Objectors herein-because it will be passed through from distributor to retailer to consumer. Citing Wanamaker and an unrelated United States Supreme Court opinion, the Majority concludes that the Sterling Act offers no suggestion that Pennsylvania courts should "embark upon such an inquiry into economic incidence for purposes of evaluating the permissibility of local taxes." Maj. Op. at 432.¹³

Taken in isolation, I do not find this argument compelling, but I have no issue with the cautionary approach it embodies. It certainly is true that, if one sufficiently broadens one's focus, one can trace the vast majority of taxes of any kind to the final participant in a given chain of commerce. Cf. Maj. Op. at 433 (quoting Commonwealth v. Neiman , 624 Pa. 53, 84 A.3d 603, 612 (2013) ) ("[M]atters that are distinct, for instance at a transactional level, can often be described as having a single subject 'if the point of view be carried back far enough.' "). That is to say, for example, that one can make a persuasive argument in the abstract that the income tax burden imposed upon the chief executive of a given soft drink manufacturer has a direct, if miniscule, effect on the price at retail of a can of that soft drink. But merely citing the "legal incidence" approach and calling it a "reasonably bright line standard" does not immunize that test from similar difficulties, especially when one inquires as to "the subject matter" of the tax, which, too, can be described so broadly as to encompass whole swaths of commercial activity or so narrowly as to all but eliminate any practical likelihood that any tax will be deemed duplicative of another, provided they differ in any trivial detail. In either instance, there remains a degree of discretion in the application, a flexibility that can become an unprincipled stain on the governing jurisprudence or, duly restrained, may serve as a tremendous asset in fairly circumscribing a municipality's taxing authority where, as in this case, local duplication of a state tax is verboten.

I am sensitive to the limited utility of an "economic incidence" test. As noted above, applying such a test at a sufficient level of generality would lead one to conclude that virtually any tax Philadelphia might impose would in some sense be duplicative of some other state tax, since every cost of doing business will tend to flow downstream to the end-purchaser. Thus, if that consideration is to enter into our analysis at all, it must be utilized narrowly and with great care. Still, I cannot endorse the Majority's categorical rejection of the relevance of the economic effect of a given tax for purposes of the Sterling Act inquiry, given our oft-repeated concern for the practical effect of the tax rather than how it is described or how it nominally operates. Who benefits and who is burdened are essential inquiries in discerning the true nature of any tax. Simply to assert that he who superficially bears the immediate burden of a given tax is the only burdened party, or even the chiefly burdened party, is to undermine our time-honored emphasis upon the practical effects of a given tax. Certainly, who bears the brunt of the tax in the final tally has some relevance to the question, even if courts employ that tool with sensitivity to its explanatory limitations.

The Sterling Act limits the taxing authority it confers by denying Philadelphia "the authority to levy, assess and collect ... any tax on a privilege, transaction, subject or occupation, or on personal property, which is now or may hereafter become subject to a State tax or license fee." 53 P.S. § 15971(a). Plain language strips most of the enumerated categories of taxation of any relevance to this case, leaving us to focus upon the two that remain: whether the distribution "transaction," as such, is impermissibly duplicative of the state sales tax; or, whether the actual "subject" of the distribution tax echoes the "subject" of the state tax. In assessing the import of these terms, we must give distinct effect to each of them. See 1 Pa.C.S. §§ 1921(a) ; White Deer Twp. v. Napp , 603 Pa. 562, 985 A.2d 745, 760-61 (2009) (observing that we must interpret a statute, "if possible, to give effect to all its provisions," requiring us to give each term in a statute independent meaning and effect).

The answer to the "transaction" inquiry is clear: The point of imposition and collection, as well as the measure, of the distribution tax plainly differ materially from the sales tax as applied to retail soft drink purchases. Thus, if there is impermissible duplication, it lies in the conclusion that the PBT and state sales tax, under the instant circumstances, have the same "subject." For present purposes, the question presented is whether the subject of the PBT is, practically, the distribution or retail sale of SSBs.

The Majority relies ultimately on a fairly rigid application of the Nabisco rubric, noting the distinction between the putative subject of the PBT (distribution versus retail sales), the different measures employed to assess each (volume versus a percentage of retail price), and the distinct putative payors of the tax (distributors versus consumers). These, the Majority would conclude, obviate any suggestion that the "subject" of the PBT is duplicative of the "subject" of the sales tax.

Whatever its superficial appeal, I find this analysis wanting in practice. Informed by our continuing emphasis on assessing the defining aspects of a tax by how it actually operates in the world, I am compelled to conclude that the true and intended subject of the PBT is, and has always been, the retail purchase and consumption of SSBs. To find otherwise is to insist that, in knowingly deterring the purchase of soft drinks by effectively ensuring some increase in the retail price, it was merely the curtailment of their distribution that the Council actually effectuated and intended. This neat conclusion is one that the text of the PBT cannot bear and in fact does not sustain, given how quickly that text wanders afield of that particular commercial function (i.e. , distribution) whenever it must in order to ensure that not a single drop of SSB is sold at retail within the jurisdiction without first paying the prescribed assessment. To make sense of the intended reduction in consumption coupled with the raising of revenue upon the backs of the end-purchasers, which the City Council so certainly anticipated that it built that reduction into its calculations, the distribution point must have been understood merely as where the tax would be imposed for administrative purposes (with the ancillary benefit that it would furnish Council the best chance of avoiding Sterling Act invalidation).¹⁴ Nor is it persuasive to find a dispositive distinction in the method of calculation-volumetric versus price-driven. In either case, revenues raised and consumption deterred are fundamentally and inextricably responsive to the volume of SSBs purchased at retail.

Simply put, I do not find the Majority's effort to find the safe harbor of clarity in the bright-line of the "legal incidence" test reconcilable with a test requiring the assessment of a tax's practical effect . Indeed, speaking generally, I find irreconcilable the very notions of a practical inquiry and a bright-line test, and I discern no substantive benefit in this context to abandoning our long-standing if messier approach to such questions. For this reason, I find it incongruous to imply, as the Majority does, that we cannot seek a given levy's "legal incidence" by looking beyond nomenclature to focus upon its foreseen, and even intended, effects-regardless of whether that entails some consideration of economic effects. The "subject" of the PBT is SSB consumption at retail. The only way to find otherwise is to indulge the convenient fiction of calling the PBT a distribution tax, despite the fact that the levy does not even use that terminology in the critical passage and despite the fact that the PBT suggests no concern for whether it actually is levied on distribution as such, but only the concern that no SSB intended for retail sale eludes its grasp.

The Council and the Mayor, guided in part by officials and experts who anticipated and saw social good in reducing the consumption of SSBs, enacted the PBT to realize the dual benefits of funding universal pre-K education and improving public health. Although the PBT's advocates often foregrounded the educational benefits, they treated as complementary, rather than merely incidental, the public health benefits associated with substantial reductions in SSB consumption, which they anticipated would manifest disproportionately in the very same communities that would receive the lion's share of the PBT revenues collected. Nowhere is it suggested that they treated this as a happy accident. Nor should we. The Sterling Act provided sufficient authority for Council to generate new revenue by any number of means-and the political actors behind the PBT selected SSBs as the most suitable. We would unmoor Council's choice, as embodied in the text of the PBT and reinforced by the process of its development and enactment, from its full context were we to pretend that deterring SSB consumption was merely incidental. I do not discern how we may indulge this fiction. The only conventional mechanism to deter consumption is to increase the effective retail cost of SSBs. By imposing a substantial tax specifically upon SSB "distribution," Council literally banked on that effect.

It elevates form over substance to grant Philadelphia the benefit of its self-serving description, when to do so obscures the tax's foreseeable and intended effect-one that the Mayor and Council, in fact, studied in gauging the prudence and effectiveness of an SSB tax in the first instance, one that was designed to affect all avenues by which a can of cola might arrive in a bodega cooler. Furthermore, to split hairs based upon Philadelphia's chosen characterization confounds our time-honored interpretive presumptions, which unerringly favor the putative taxpayer when the scope of a tax-authorizing statute is in question.

I am sensitive to the challenges facing cities seeking to finance their own needs, especially given the limited degree to which funds flow from state coffers to address those needs. Furthermore, I am mindful that, in answer to this difficulty, the General Assembly with the Sterling Act long ago invited Philadelphia to finance its own initiatives by collecting revenues from those who live and do business within the city limits. But the Sterling Act's grant of broad taxing authority is not absolute, and it specifically precludes Philadelphia from piggybacking on extant state taxes. The General Assembly has seen fit to impose a sales tax on certain goods, including a class of beverages that overlaps heavily with SSBs. In imposing a tax that foreseeably would be borne in substantial part by the retail purchaser, the City of Philadelphia knowingly stacked the PBT upon the state sales tax, and in so doing duplicatively taxed retail trade in soft drinks, a "subject" already burdened by the state sales tax. For these reasons, I believe we are bound to find that the PBT impermissibly imposes upon the state sales tax in violation of the Sterling Act.

A rose by any other name smells just as sweet, and, whether styled a retail tax or a distribution tax, the levy here at bar, like the state sales tax, raises revenue specifically by burdening the proceeds from the retail sale of sugar-sweetened beverages. This the Sterling Act does not allow. I respectfully dissent.

1 Phila. Code. § 19-4100.

2 Act of Aug. 5, 1932 P.L. 45, § 1, as amended 53 P.S. §§ 15971 -73.

3 As highlighted by the Majority, this moniker is misleading insofar as the tax applies to certain beverages sweetened by sugar substitutes. See Maj. Op. at 424 (citing Williams v. City of Phila. , 164 A.3d 576, 579 (Pa. Cmwlth. 2017) (en banc ); Phila. Code § 19-4101(3) ).

4 The details of the considerable overlap between SSBs under the PBT and "soft drinks" as defined by the General Assembly for purposes of excluding them from the sales tax exemption for certain food items are not essential to my analysis. However, the distinctions may be gleaned by comparing Philadelphia Code § 19-4101(3) with 72 P.S. § 7201(a) (defining "soft drinks") and the "soft drink" exemption from the sales tax exclusion for "food or beverages for human consumption" provided in 72 P.S. § 7204(29).

5 See Transcript, Hearing on Bill Nos. 160170, 160171, and 160172 Before the Committee of the Whole (hereinafter "Committee Hearing"), 5/3/2016, at 112-13 (testimony of Thomas Farley, Commissioner of Philadelphia's Department of Public Health) (opining that the group estimating PBT receipts assumed a 55% decline in consumption). Limited excerpts of transcripts documenting this hearing and others have been submitted as exhibits to filings in the trial court. We may (and I do) take judicial notice of the full transcripts of these meetings. Transcripts of public City Council committee meetings may be obtained by utilizing the search form located at legislation.phila.gov/council-transcriptroom/transroom_committee.aspx (last reviewed June 6, 2018).

6 See Committee Hearing, 3/29/2016, at 19 (Chief of Staff Jane Slusser), 20 (Finance Director Rob Dubow).

7 Id. at 24. Chief of Staff Slusser and Finance Director Dubow relied upon the experience of Berkeley, California, following its enactment of a similar tax directed at the distribution of sugar-sweetened beverages. The degree to which the cost of the distribution tax imposed by Berkeley was passed to consumers is taken up at length in a study prepared by the Public Health Institute and the Global Food Research Program of the University of North Carolina at Chapel Hill, attached to the Complaint as Exhibit N. This pass-through question was of particular importance to Berkeley officials, because Berkeley specifically intended to reduce through retail price increases the rate of consumption of SSBs to improve public health.

8 See, e.g., Committee Hearing: Neighborhood, 4/12/2016, at 23-24 (comments of Barbara Gold, M.D., Philadelphia pediatrician).

9 Committee Hearing, 5/3/2016, at 92, 93-102 (testimony of Commissioner Thomas Farley).

10 The transcript was entered into the record as Exhibit M to the Tax Objectors' Complaint.

11 The Majority's concession in this regard arguably contradicts its later observation that its "determination that the [PBT] survives scrutiny under a plain meaning application of the Sterling Act." Maj. Op. at 435 n.19. The complexity and arguable irreconcilability of past precedent, as well as aspects of my discussion below, strongly suggest that the text of the Sterling Act is anything but a model of clarity.

12 Justice O'Brien authored the lead opinion, which no justice joined. Chief Justice Bell and Justice Roberts concurred only in the result. Justice Pomeroy filed a dissent in which Justice Eagen joined. Justices Jones and Cohen did not participate in the case. The similarity of United Tavern Owners leads the parties to debate at length which of the views expressed in that case should prevail, which prompts the Majority to discuss that 1971 decision at greater length than any other Pennsylvania case. See Maj. Op. at 435-36. I discern little if any analytic utility in United Tavern Owners , a case that failed to generate any precedential holding. Rather, I believe that we must wrestle with such rules as we can glean from the Sterling Act itself and the principles it embodies, moreso than with our inapposite and non-binding case law on the matter, which offers scant guidance.

13 Neither does the Sterling Act specifically instruct courts to consider the "base or yardstick by which the tax is applied," as Nabisco prescribes. See Nabisco , 136 A.2d at 826. It also bears noting that, to the extent the legal incidence test relies upon the person or entity upon whom the tax is imposed to distinguish one tax from another, it cannot identify a payor without in some sense engaging in what the Majority calls an "economic incidence" analysis. This is not to say that the downstream effect of a given tax should be dispositive, or even should predominate, in any inquiry of tax sameness. It is merely to suggest that what the Majority treats as a bright-line distinction between economic incidence and legal incidence proves murky in practice.

14 The Majority endorses the United States Supreme Court's concern, stated in Oklahoma Tax Commission v. Chickasaw Nation , 515 U.S. 450, 115 S.Ct. 2214, 132 L.Ed.2d 400 (1995), that, "if we were to make 'economic reality' our guide, we might be obligated to consider, for example, how completely retailers can pass along tax increases without sacrificing sales volume-a complicated matter dependent on the characteristics of the market for the relevant product." Maj. Op. at 431-32 (quoting Chickasaw Nation , 515 U.S. at 459-60, 115 S.Ct. 2214 ). Respectfully, while this may present an intractable problem in another case, I disagree that it establishes the necessity of a categorical exclusion of such considerations, especially where, as here, the text of the ordinance as well as the record so clearly reflect a conscious concern for, and arguably the desire for, the trickling down of the PBT's levy to the retail consumer. It is implicit in any practical inquiry that its scope and contour are case-specific. It seems to me uncontroversial that a particular economic consideration which a court finds germane in one case may be too problematic or ill-fitting to incorporate into the court's analysis in a different case.

JUSTICE MUNDY, DISSENTING

Philadelphia City Council skillfully constructed the Sugar-Sweetened Beverage Tax¹ (Beverage Tax) to appear to tax distributors, rather than sugar-sweetened beverages (SSBs) retailed in Philadelphia. However, because the tax does not tax all distributors, and only taxes SSBs intended for retail sale in Philadelphia, the Pennsylvania sales tax on the retail sale of SSBs preempts the Beverage Tax. 72 P.S. § 7202(a).

At the outset, I agree with the Majority that the legal-incidence test applies, specifically an analysis of the subject matter and measure of the tax, and not an economic-incidence test. Majority Opinion at 431-32. I further agree that the particular motivations of City Council in enacting the Beverage Tax are not relevant to our inquiry. Id. at 433-34, n. 16. However, I disagree with the Majority's conclusion that the subject of the Beverage Tax is the distributor. Id. at 434-35. While it is true that the distributor or dealer is ultimately the payor, and thus seemingly the subject, for the reasons that follow, in my view the SSBs are the subject of the Beverage Tax.

In Murray v. City of Philadelphia , 364 Pa. 157, 71 A.2d 280 (1950), this Court considered an amendment to a City ordinance which increased an existing tax, and imposed the tax on additional subjects. The Court's analysis focused on whether the City had the authority to impose the tax under the Sterling Act.² In so doing, the Court noted, "whether the city tax conflicts with that imposed by the state, the practical operation of the two taxes is controlling as against mere difference in terminology from time to time employed in describing taxes in various cases." Id. at 284. Ultimately, this Court held "[w]hen the corporation pays to its stockholders income out of the property on which the capital stock tax has been paid, the city may not again tax the income in the hands of the stockholder; and the reason is that the Sterling Act did not confer the power to tax the 'subject' that the state had taxed; on the contrary, tax was prohibited." Id. at 285. The subject of the tax in the hands of the corporation was property, while the subject in the hands of the stockholder was income; nevertheless, the practical operation was a duplicative tax.

In this case, the subject of the tax is SSBs intended to be sold in Philadelphia; it is not a tax on all distributors in Philadelphia. If the tax applied to the sale of all SSBs sold in the City of Philadelphia, the issue would be resolved as a clear violation of the Sterling Act. In order to distance the tax from the retail transaction, the Beverage Tax is applicable only on distributors who sell SSBs to dealers who intend to retail the beverages in the City of Philadelphia. PHILA. CODE. § 19-4103. Further, a dealer is subject to the tax if the distributor has not paid it. PHILA. CODE. § 19-4105(2). However, the tax does not apply to the act of distribution because not all distributors in Philadelphia are subject to the tax. For example, under the parameters of the Beverage Tax, a distributor is exempt from the tax if it sells SSBs to a dealer in Philadelphia as long as the dealer intends to sell the beverages outside the city limits. Additionally, a distributor is exempt if it sells SSBs to dealers who do not intend to sell the beverage but rather to give it away or provide it to their own employees for consumption. Likewise, a distributor located outside the Philadelphia City limits is obligated to pay the tax if it sells SSBs to a dealer transporting the SSBs into Philadelphia for retail sale. Plainly, these illustrations demonstrate that the subject of the tax is only SSBs retailed in Philadelphia, albeit imposed at the distribution level prior to holding the SSBs out for retail sale. The imposition of the tax at the distribution level to attempt to avoid duplication of the tax at the retail level is strikingly similar to Murray .

Thus, while I agree that the legal-incidence of taxing the transaction of distribution may not be a violation of the Sterling Act, I cannot agree that under the specific language of the Beverage Tax that it is truly a tax on distribution. Instead, the Beverage Tax is a tax on SSBs intended for retail sale in Philadelphia. As a result, the imposition of the Beverage Tax is a violation of the Sterling Act by the Philadelphia City Council.

1 See Act of Aug. 5, 1932, P.L. 45, § 1, as amended , 53 P.S. §§ 15971 -73.

2 Below, I have occasion to cite a separate decision of this Court involving National Biscuit Co. For clarity's sake, I use Nabisco only to refer to our 1957 decision.